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Why benchmarking cloud vs. current IT costs is so hard

By Bernard Golden | Dec. 4, 2009
Cloud providers make their services' costs quite transparent, says virtualisation and cloud computing specialist Bernard Golden. The trouble is, for most companies, current data centre costs remain opaque. Will new tools help?

The investment Bechtel was able to make, however, won't be possible for most organisations. They will be stuck with their old, high-cost business processes, unable to fund new data centres and bespoke fibre optic connectivity. For these organisations, transparent cost comparisons, once available, will force a discussion of how to begin the shift to lower-cost methods of IT. Offhand dismissal of cloud computing providers as "must be more expensive, after all, they're trying to make a profit" will be a thing of the past. Despite each of the comparison providers in the Bechtel example being profit-seeking organisations, they were able to operate far less expensively because they've been built from the ground up to be efficient.

I expect products/services like IT Financial Management will be in high demand over the next 18-24 months as organisations seek clarity about their IT cost structures and begin serious work on squeezing out IT costs. We'll see restructuring, not trimming. And we'll see a lot more use of cloud computing.

Bernard Golden is CEO of consulting firm HyperStratus, which specialises in virtualisation, cloud computing and related issues. He is also the author of "Virtualization for Dummies," the best-selling book on virtualisation to date.


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